Government Debates Future of GPS System and IIF Satellites

The US economy has been struggling since 2007. Many are hoping that the country does not enter a double-dip recession this year. Budget cuts are a harsh reality for cities and states across the US. Budget cuts affect us all, and now they are affecting the US global positioning system aka GPS.

The U.S. Air Force has done an incredible job with the GPS system. But budget issues are forcing the US federal government to carefully scrutinize its plans for space. One issue that may end up on the table is whether to proceed with plans to develop a new generation of “GPS III” satellites, or try to save money by sticking with the existing GPS IIF design, according to an article from Defence Professionals.

The issue has far-reaching budgetary implications, because it impacts launch costs, the design of ground segments for managing and utilizing GPS satellites, and the compatability of future satellites with other navigation systems.

Boeing (NYSE: BA), the builder of current GPS IIF satellites, apparently has crafted a proposal to sell additional satellites in that configuration to the Air Force for less than $100 million per spacecraft. In the military space business — where satellites sometimes cost more than a billion dollars each — that is considered to be a bargain.

The satellites would not be able to meet some of the requirements specified for the next-generation GPS III birds, but they would satisfy most operational needs while enabling the Air Force to avoid spending billions of dollars on the development and testing of new designs. The proposal is well-timed given pressures on the defense budget and spreading awareness of just how serious the government’s long-term fiscal challenges may be.

However, the Air Force is ambivalent about Boeing’s proposal, because the company took much longer than expected to develop and orbit the first two GPS IIF satellites, and the satellites have not yet demonstrated all necessary performance features. Although sticking with IIF would enable the Air Force to avoid all the “non-recurring” costs associated with developing the next generation, the service might eventually end up spending more money on launches because GPS III satellites are designed to be launched in pairs and the current satellites can only be launched one at a time.

That’s an important consideration given that the 30 or so spacecraft in the constellation must be periodically replaced to assure precise positioning information remains available to all users. It also is not so clear what the ultimate cost and schedule for buying more of the current satellites would be, since parts of Boeing’s supplier base have gone cold and would need to be reconstituted.

The key issue, though, is the requirements for the next-generation system that current GPS satellites cannot meet. How important are they, and will the Air Force have the money needed to satisfy them? It’s easy to say right now they must be met, but no one knows where the service will come down if it has to choose between GPS III and a new bomber. On the other hand, if the Boeing proposal ends up costing more than currently advertised to supply satellites in a similar timeframe, the Air Force might as well go ahead and buy the more capable system. Considering the importance of GPS to military and civilian users alike, this debate is not likely to end anytime soon.